Arbitration Provisions

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Contracts for design services often require the parties to resolve any dispute through arbitration instead of traditional State court litigation. In fact, the Standard Form Agreement between architect and owner (AIA document B101; formerly B141) as well as the standard form agreement between architect and consultant (AIA document C401; formerly C141) contain a fairly standard arbitration provision. Given the recent California Supreme Court decision in Cable Connection, Inc. v. DirectTV, Inc. (2008) 44 Cal. 4th 1334, a prudent design professional practicing in California would revise the arbitration provisions in their contracts to add greater protection for their potential errors and omissions liability.

In Cable Connection, the California Supreme Court was presented with two questions to resolve: (1) may the parties structure their agreement to allow for judicial review of legal error in the arbitration award?; and (2) is class wide arbitration available under an agreement that is silent on the matter? The first issue presented should be of particular interest to design professionals in California.

Please see full article below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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